PART I [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Texas Pacific Land Corporation, including Balance Sheets, Statements of Income, and Cash Flows, along with notes on reorganization and accounting policies Condensed Consolidated Balance Sheet Highlights (in thousands) | | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$695,617** | **$571,635** | | Cash and cash equivalents | $372,761 | $281,046 | | **Total Liabilities** | **$94,575** | **$86,451** | | **Total Equity** | **$601,042** | **$485,184** | Condensed Consolidated Statement of Income Highlights (in thousands) | | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$123,693** | **$74,383** | **$303,780** | **$228,260** | | Operating Income | $103,240 | $56,748 | $236,532 | $162,029 | | **Net Income** | **$83,837** | **$46,275** | **$190,935** | **$131,258** | | Net Income per Share | $10.82 | $5.97 | $24.62 | $16.92 | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Cash provided by operating activities | $174,512 | $161,859 | | Cash used in investing activities | $(9,989) | $(25,647) | | Cash used in financing activities | $(74,786) | $(124,098) | | **Net increase in cash** | **$89,737** | **$12,114** | - On January 11, 2021, the company completed a tax-free reorganization from a business trust to a Delaware corporation[22](index=22&type=chunk)[41](index=41&type=chunk) - The company operates in two segments: Land and Resource Management, and Water Services and Operations[24](index=24&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, detailing business overview, market conditions, and segment performance, highlighting strong recovery in oil and gas royalty revenues and a robust liquidity position [Overview](index=16&type=section&id=Overview) TPL is one of the largest landowners in Texas, primarily in the Permian Basin, generating revenue from land use fees, water sales, and royalties across the oil and gas development value chain without being a producer - TPL is one of the largest landowners in Texas with approximately **880,000 acres**, primarily in the Permian Basin[57](index=57&type=chunk) - The company's business model generates revenue from various sources throughout the life cycle of an oil and gas well, including land use fees, water sales, and royalties, without being a producer[59](index=59&type=chunk) - Texas Pacific Water Resources LLC (TPWR), a subsidiary, provides full-service water offerings to operators in the Permian Basin, including sourcing, treatment, and disposal solutions[64](index=64&type=chunk) [Market Conditions](index=17&type=section&id=Market%20Conditions) Market conditions in 2021 show a rebound in Permian Basin development activity due to higher commodity prices, though still below pre-pandemic levels, with operators managing capital cautiously amid labor and equipment shortages - Development activity in the Permian Basin has rebounded from 2020 lows due to higher commodity prices, but remains below pre-pandemic levels as operators manage capital cautiously[66](index=66&type=chunk) Permian Basin Activity Metrics | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | WTI Cushing avg price/bbl | $70.58 | $40.89 | $65.05 | $38.04 | | Henry Hub avg price/mmbtu | $4.35 | $2.00 | $3.61 | $1.87 | | Avg weekly horizontal rig count | 235 | 121 | 215 | 235 | - The company has invested in electrifying its water sourcing infrastructure to reduce dependence on fuel and equipment rentals, thereby lowering operating costs[68](index=68&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$372.8 million** in cash and cash equivalents and no debt as of September 30, 2021, allocating capital to business growth, stock repurchases, and dividends - As of September 30, 2021, the company had cash and cash equivalents of **$372.8 million** and no debt or credit facilities[75](index=75&type=chunk)[76](index=76&type=chunk) - A stock repurchase program of up to **$20.0 million** was approved in May 2021, with **$11.2 million** worth of shares repurchased through September 30, 2021[76](index=76&type=chunk)[44](index=44&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) This sub-section provides a detailed comparison of operating results for the three and nine-month periods ending September 30, 2021, versus the same periods in 2020, driven by a significant increase in oil and gas royalty revenue [Three-Month Comparison (Q3 2021 vs Q3 2020)](index=19&type=section&id=Three-Month%20Comparison%20(Q3%202021%20vs%20Q3%202020)) For Q3 2021, total revenues increased **66.3%** to **$123.7 million**, and net income rose **81.2%** to **$83.8 million**, primarily driven by a doubling of oil and gas royalty revenue and a **50.7%** increase in Water Services and Operations revenue Consolidated Results - Q3 2021 vs Q3 2020 (in thousands) | | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$123,693** | **$74,383** | **+66.3%** | | **Net Income** | **$83,837** | **$46,275** | **+81.2%** | Oil and Gas Royalty Revenue & Production - Q3 Comparison | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | Total Royalty Revenue | $79.1M | $31.8M | | Production (MBoe/d) | 19.5 | 15.7 | | Realized Price ($/Boe) | $46.07 | $23.02 | - Water sales revenue increased **61.1%** to **$19.6 million** in Q3 2021, driven by a **60.4%** increase in the volume of sourced and treated water sold[92](index=92&type=chunk) - Land sales were zero in Q3 2021, compared to **$11.5 million** in Q3 2020[88](index=88&type=chunk) [Nine-Month Comparison (YTD 2021 vs YTD 2020)](index=23&type=section&id=Nine-Month%20Comparison%20(YTD%202021%20vs%20YTD%202020)) For the nine months ended September 30, 2021, revenues increased **33.1%** to **$303.8 million**, and net income grew **45.5%** to **$190.9 million**, primarily due to a **97.4%** surge in oil and gas royalty revenue Consolidated Results - Nine Months 2021 vs 2020 (in thousands) | | Nine Months 2021 | Nine Months 2020 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$303,780** | **$228,260** | **+33.1%** | | **Net Income** | **$190,935** | **$131,258** | **+45.5%** | Oil and Gas Royalty Revenue & Production - Nine-Month Comparison | Metric | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | | Total Royalty Revenue | $186.8M | $94.6M | | Production (MBoe/d) | 17.5 | 16.0 | | Realized Price ($/Boe) | $41.01 | $22.59 | - Easements and other surface-related income decreased **23.4%** to **$24.0 million**, primarily due to a **$9.7 million** drop in pipeline easement income[105](index=105&type=chunk) - Land sales revenue fell sharply to **$0.7 million** in the first nine months of 2021 from **$15.9 million** in the same period of 2020[106](index=106&type=chunk) [Cash Flow Analysis](index=26&type=section&id=Cash%20Flow%20Analysis) For the nine months ended September 30, 2021, cash from operations increased to **$174.5 million**, while cash used in investing and financing activities decreased due to lower acquisitions and dividend payments Cash Flow Summary (in millions) | Cash Flow Activity | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | | Operating | $174.5 | $161.9 | | Investing | $(10.0) | $(25.6) | | Financing | $(74.8) | $(124.1) | - Dividends paid totaled **$64.0 million** (**$8.25 per share**) in the first nine months of 2021, compared to **$124.1 million** (**$16.00 per share**, including a special dividend) in the same period of 2020[122](index=122&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risk disclosures since December 31, 2020 - There have been no material changes in the information related to the market risk of the Company since December 31, 2020[127](index=127&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the quarter, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the Company's disclosure controls and procedures are effective[128](index=128&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that would have a material effect[129](index=129&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not involved in any material pending legal proceedings - The Company is not involved in any material pending legal proceedings[131](index=131&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes have occurred in the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020[132](index=132&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity during Q3 2021, where **6,179 shares** were repurchased at an average price of **$1,406 per share** under a **$20.0 million** program, with **$8.8 million** remaining available Share Repurchases for Q3 2021 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2021 | 2,059 | $1,489 | | August 2021 | 2,350 | $1,433 | | September 2021 | 1,770 | $1,273 | | **Total** | **6,179** | **$1,406** | - The repurchases were made under a stock repurchase program approved on May 3, 2021, for up to **$20.0 million**, with **$8,807,130** remaining available under the plan as of the end of the quarter[133](index=133&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and iXBRL data files for financial statements - Exhibits filed include Rule 13a-14(a) and Section 906 certifications for the CEO and CFO[136](index=136&type=chunk) - The financial statements and cover page data are provided in iXBRL format[136](index=136&type=chunk)

Financial Data and Key Metrics Changes - For Q2 2021, the company reported net income of $57 million or $7.36 per share, compared to $27.6 million or $3.56 per share in Q2 2020, primarily due to increased oil and gas royalty revenue [16][17] - Total revenue for Q2 2021 was $95.9 million, up from $57.3 million in the same quarter last year, with oil and gas royalty revenue increasing 184% to $58.2 million [17][18] - Average realized oil price was approximately $65 per barrel in Q2 2021, compared to approximately $25 per barrel during the same period last year [17] Business Line Data and Key Metrics Changes - Production during Q2 2021 averaged approximately 16,400 barrels of oil equivalent per day, roughly flat sequentially from Q1 2021 [7] - Produced water royalty revenues increased over 20% sequentially from Q1 2021, benefiting from a one-time catch-up payment [10] - Water revenue was $27.9 million in Q2 2021, up from $21.5 million in the prior year, driven by increases in both source water and produced water royalty volumes [18] Market Data and Key Metrics Changes - The company had 565 gross drilled but uncompleted wells (DUCs) and 474 gross permits as of June 30, indicating ongoing activity in the Permian Basin [8] - The company noted that producers remain disciplined, with activity levels not yet at pre-COVID levels but still active in developing leaseholds [8] Company Strategy and Development Direction - The company positions itself as an "ETF for the Permian Basin," benefiting from multiple cash flow streams throughout the life cycle of a well [12][13] - The management expressed confidence in the asset quality underlying royalties and extensive surface acreage, believing it will create long-term value despite uncertainties related to COVID-19 and commodity prices [14] Management's Comments on Operating Environment and Future Outlook - Management indicated that they expect production in the second half of 2021 to be at least on par with the first half, supported by a robust level of current inventory [9][30] - The management emphasized the importance of maintaining a low leverage profile and expressed a preference for capitalizing with cash rather than debt, although they would consider debt for excellent opportunities [34] Other Important Information - The company declared a cash dividend of $2.75 per share, payable on September 15, with year-to-date dividends totaling $5.50 per share [21] - The company joined the Russell 1000 Index, marking a significant milestone [22] Q&A Session Summary Question: Capital allocation approach and attractive opportunities - Management stated they are always looking for deals but are very selective, benefiting from a strong cash position that allows for optionality in capital allocation [25][26] Question: Maintenance scenario for net wells - Management indicated that approximately seven net wells would be needed to maintain production levels, with a robust inventory supporting this [27][30] Question: Willingness to go into debt for valuable assets - Management expressed a preference for maintaining a low leverage profile but would consider debt for excellent opportunities [34] Question: Changes in activity or new production customers - Management noted that consolidation in the industry has led to new relationships with operators, enhancing their exposure [35] Question: Expectations for activity based on permit scrapes - Management reported robust permitting activity, particularly from major operators, supporting ongoing development [42] Question: Trajectory of capture rates for water businesses - Management highlighted strong capture rates for both source water and produced water, with growth expected to continue [44][45] Question: Appetite to hedge production profile - Management stated they have historically managed the business without hedges, allowing them to fully benefit from favorable commodity prices [46][48]

Land Ownership and Resources - Texas Pacific Land Corporation owns approximately 880,000 acres of land in Texas, primarily concentrated in the Permian Basin[58]. - The Permian Basin remains a key area for the company's revenue generation, with significant fluctuations in revenue due to oil and gas pricing and drilling activity[60]. Financial Performance - Revenues increased by $38.6 million, or 67.5%, to $95.9 million for the three months ended June 30, 2021, compared to $57.3 million for the same period in 2020[80]. - Net income more than doubled to $57.0 million for the three months ended June 30, 2021, compared to $27.6 million for the same period in 2020[80]. - Total consolidated revenues for the six months ended June 30, 2021 increased by $26.2 million, or 17.0%, to $180.1 million compared to $153.9 million for the same period in 2020[97]. - Net income for the six months ended June 30, 2021 increased by $22.1 million, or 26.0%, to $107.1 million compared to $85.0 million for the same period in 2020[97]. Oil and Gas Revenue - Oil and gas royalty revenue was $58.2 million for the three months ended June 30, 2021, compared to $20.5 million for the same period in 2020, reflecting a significant increase[84]. - Total oil and gas royalties increased to $107.737 million for the six months ended June 30, 2021, up from $62.873 million in the same period of 2020, representing a 71.4% increase[102]. - Average realized prices for oil rose to $60.55 per barrel, a 56.4% increase from $38.78 per barrel in the same period of 2020[102]. Water Services and Operations - Water services and operations segment revenues increased by 32.3% to $28.7 million for the three months ended June 30, 2021, compared to $21.7 million for the same period in 2020[89]. - Water sales revenue was $12.5 million for the three months ended June 30, 2021, an increase of 48.2% compared to $8.4 million for the same period in 2020[91]. - Water Services and Operations segment revenues decreased by 10.7% to $55.1 million for the six months ended June 30, 2021, down from $61.6 million in the same period of 2020[105]. Production Volumes - Oil production volumes decreased to 1,328 MBbls for the six months ended June 30, 2021, down from 1,423 MBbls in the same period of 2020[102]. - Natural gas production increased to 5,516 MMcf for the six months ended June 30, 2021, compared to 4,506 MMcf for the same period in 2020[102]. Cash Flow and Investments - Cash flows provided by operating activities decreased to $96.5 million for the six months ended June 30, 2021, down from $104.1 million in the same period of 2020[113]. - Cash flows used in investing activities significantly decreased to $4.5 million for the six months ended June 30, 2021, compared to $25.3 million in the same period of 2020[114]. - The company invested approximately $4.9 million in Texas Pacific Water Resources LLC (TPWR) projects during the six months ended June 30, 2021[66]. Stock and Dividends - The company has approved repurchases of up to $20.0 million of its Common Stock, with $2.5 million repurchased through June 30, 2021[76]. - Total dividends paid during the six months ended June 30, 2021 were $42.7 million, down from $124.1 million in the same period of 2020[115]. Operational Efficiency - The company continues to prioritize cost reduction measures and has invested in electrifying its water sourcing infrastructure to reduce operational costs[69]. - The average monthly horizontal permits in the Permian Basin increased to 665 in June 2021 from 402 in June 2020, reflecting a recovery in drilling activity[73]. - The average monthly horizontal wells drilled in the Permian Basin rose to 386 in June 2021 from 171 in June 2020, indicating increased drilling activity[73].

Financial Data and Key Metrics Changes - For Q1 2021, net income was $50.1 million or $6.45 per common share, down from $57.4 million or $7.40 per sub-share certificate in the same quarter of the prior year, a decrease of $7.3 million or $0.95 per share [35] - Total revenue for Q1 2021 was $84.2 million, compared to $96.6 million for the same quarter last year, reflecting a decline [37] - Oil and gas royalty revenue increased by 16.9% to $49.5 million compared to the prior year, driven by an $8.8 million increase in gas royalty revenue due to a 121% increase in average realized price [37][38] Business Line Data and Key Metrics Changes - Oil and gas royalties accounted for 59% of revenues in Q1 2021, with an average royalty per acre of 4.4% [10] - SLEM (surface leases, easements, and material sales) accounted for 10% of revenues in Q1 2021, with renewable energy revenue increasing by $2 million from Q4 2020 due to higher pricing [18] - Water solutions business represented 31% of first-quarter revenues, with contracts structured to capture a large market share in Permian water solutions [19][21] Market Data and Key Metrics Changes - As of March 31, 2021, 17% of all Permian rigs were located on TPL drilling spacing units, up from 11% as of December 31 [12] - TPL DSUs accounted for 18% of total spuds across the Permian during Q1, with 14% of all permits approved by the Texas Railroad Commission intersecting TPL DSUs [13] Company Strategy and Development Direction - The company aims to increase efficiencies in existing business lines and grow market share, with potential bolt-on acquisitions aligned with core revenue streams [32] - The reorganization from a trust to a corporation enhances corporate governance and aligns management, Board, and shareholder interests [31] Management's Comments on Operating Environment and Future Outlook - The oil and gas markets have normalized post-COVID-19, with Q1 2021 oil prices returning to $60 per barrel, positioning the company to capitalize on the recovery [24][26] - The impact of the February winter storm resulted in an estimated five to six days of production loss, approximately 6% of the quarter [28] Other Important Information - The company declared a cash dividend of $2.75 per common share for Q1, payable on June 15 [45] - A stock repurchase program was approved to buy up to $20 million of outstanding stock through December 31, 2021 [46] Q&A Session Summary Question: Return of capital strategy and balance between stock repurchases and dividends - Management emphasized a consistent increase in dividends over the past 17 years and a focus on making the best capital allocation decisions for shareholders [54] Question: Appetite for acquisitions and parameters for assessing opportunities - The company is focused on evaluating assets across all revenue streams and remains opportunistic without needing to chase acquisitions for growth [55] Question: Production visibility and impact of permits on rig activity - Current DUC inventory and permit count provide good visibility for continued production pace through the end of the year [56] Question: Production split by product and winter storm impact on royalty production - Oil production was approximately 43% to 44% of total production, with a five to seven-day downtime expected due to the winter storm [57][58] Question: Performance of different portfolio pieces in 2020 - The produced water royalty side of the business saw a 30% increase, serving as a hedge for other businesses that did not perform as well [61] Question: ESG considerations and opportunities - The company views ESG as a significant opportunity, particularly in reducing flaring and enhancing relationships with operators [63]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 1-39804 Exact name of registrant as specified in its charter: Texas Pacific Land Corporation State or other jurisdict ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 1-39804 Exact name of registrant as specified in its charter: Texas Pacific Land Corporation State or other jurisdiction o ...